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Economy in Brief

EMU Retail Spending and Plans Continue to Roll Over
by Robert Brusca June 4, 2008

Euro Area retail sales are weak in April just as they were in March and in February. It’s no surprise then that one month into the new quarter Retail sales volumes are falling at a 7.6% annual rate, led by an 8.3% volume drop in nonfood items.

The sequential growth rates for the main aggregates (total, food and nonfood) show clearly accelerating weakness in retail sales. It is not hard to see why the OECD cut its forecasts in its new projections released on Wednesday.

The consumer, his sentiment and his spending habits, are under clear pressure. Europe’s industrial measures have been held aloft by strength in capital spending, but it’s time to wonder what is keeping that aloft. In Japan, a country as well plugged into the overseas growth markets as any, cap-ex spending turned weak again in the recent government survey.

Europe seems to have even harder times ahead, made harder still by and an inflexible ECB over what are actually moderate inflation pressures during very unusual times with steeply spiking oil prices. The Fed has not exactly been a fountain of ease but it has done a lot more for the US economy than that one-trick pony known as the ECB has done for Europe. Spare the rate, spoil their fate.

Euro Area (13) Retail Sales Volume
  Apr-08 Mar-08 Feb-08 3-Mo 6-MO 12-Mo
Euro 13 Total -0.6% -0.9% -0.2% -6.8% -3.5% -2.6%
Food -1.0% -0.3% 0.1% -4.7% -4.3% -3.4%
Non food -0.5% -1.2% -0.4% -8.2% -3.0% -2.0%
Textiles #N/A -5.0% 1.1% -8.5% -11.4% -5.0%
HH Goods #N/A -1.2% -0.2% -4.3% -3.6% -2.9%
Books news, etc #N/A -1.5% -0.2% 1.8% 0.2% -0.3%
Pharmaceuticals #N/A -0.3% 0.4% 2.0% 1.9% 2.8%
Other NonSpec #N/A -1.2% 0.2% -1.1% -1.9% -2.0%
Mail Order #N/A -1.3% -1.1% -8.2% -0.8% 0.1%
Non-Food Country Detail Volume
Germany -4.2% -1.4% 1.1% -16.7% -4.9% -4.2%
France #N/A -1.1% 0.0% #N/A #N/A #N/A
Italy (Total; Value) #N/A -0.5% 0.2% -0.7% -0.2% -0.5%
UK(EU) -1.6% -0.1% 1.8% 0.4% 4.3% 4.8%
Shaded areas calculated on a one-month lag due to lagging data
The EA 13 countries are Austria, Belgium, Finland, France, Germany,
Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia
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